At the advent of the credit crunch, it has been increasingly difficult for everyone to maintain payment of their debts. This has been due to an escalation of interest rates and instability of jobs in the market. Workers have been layed off everywhere. One of the sectors that were struck hard by the current financial crisis is the real estate sector. Home buyers have been finding it more grueling now than ever to pay off their mortgages to the banks. When the home buyer reaches the point wherein he can’t pay the mortgage anymore, the bank or the financial institution can seize the property and sell it to somebody else. This is called as foreclosure.
Foreclosure:
Foreclosure is the legal process by which the lender revokes (forecloses) the borrower’s right of redemption to a property that is still under mortgage to the lender normally due to delinquency. A court order (specifically called a foreclosure order) is required in foreclosure of a property. The borrower is given an opportunity by the court to redeem the property by payment of the entire loan including the foreclosing expenses. However, if the home owner was not able to pay the whole amount within the prescribed time, the court will proceed with the court order. Thereafter, the mortgaged property can be put on sale by the lender. Sales proceeds will go to the lender and will give the remainder to the borrower (if any). If the sale is not sufficient to cover the whole debt, the borrower is still liable to the lender of the shortfall.
Disadvantages of Foreclosure:
It is a sad situation when one’s home has undergone foreclosure. Of course every home owner would want to stop home foreclosure now more than ever since the value of the real estate is plummeting. Chances are that people would be buying the mortgaged home in a value which is lower than its “real” value.
How to stop home foreclosure?
The next question would be how we can stop foreclosure? Specifically how can we stop home foreclosure? With today’s typical financial crisis and economical juncture, everybody is faced with a risk of encountering unfortunate situations may lead to foreclosure of one’s home.
One way to stop foreclosure is by availing loan from financial institutions. The homeowner can use the proceeds from the loans to pay off their debt to the real estate lenders. This is to avoid losses by selling the property at a lower value.
Avoid Foreclosure:
Of course it is still best to avoid foreclosure rather than remedy it. Home owners should look at their credit standing first before going to a home mortgage. They should also check their capacity to pay the loan. The financial crisis should give a clear message to everyone to not live beyond their means.
Monthly payment for loan should be up to date so they will not pile up and become a burden later on. Delinquency starts with a month of not paying the loan that later on bloats up.
These are only some of the ways on how we can stop foreclosure now.
